Villanueva v. Oro - Insurance Proceeds

81 PHIL 464

Facts:

>  West Coast Life Insurance Company issued two policies of insurance on the life of Esperanza Villanueva, one for 2T, maturing April 1, 1943; and other for 3T maturing Mar. 31, 1943.

>  In both policies, West agreed to pay 2T either to Esperanza if still living on Apr 1, 1943; or to beneficiary Bartolome Villanueva, or the father of the insured immediately upon receipt of the proof of death of Esperanza.

>  The policy also gave her the right to change the beneficiary.

>  In 1940, Bartolome died, and he was substituted as beneficiary under the policies by Mariano, Esparanza’s brother.

>  Esperanza died in 1944 without having collected the insurance proceeds.  Adverse claims for the proceeds were presented by the estate of Esperanza on one hand and by Mariano on the other.

>  CFI held that the estate of Esperanza was entitled to the proceeds to the exclusion of the beneficiary.

Issue:

Whether or not the beneficiary is entitled to the proceeds.

Held:

NO.

Under the policies, the insurer obligated itself to pay the insurance proceeds to: (1) the insured if the latter lived on the dates of maturity; or (2) the beneficiary if the insured died during the continuance of the policies.  The first contingency excludes the second, and vice versa.  In other words, as the insured Esperanza was living on April 1 and March 31, 1943, the proceeds are payable exclusively to her or to her estate unless she had before her death otherwise assigned the matured policies.

The beneficiary could be entitled to said proceeds only in default of the first contingency.  To sustain the beneficiary’s claim would be to altogether eliminate from the policies the condition that the insurer “agrees to pay to the insured if living.”

This conclusion tallies with American Authorities who say that:  The interest of the insured in the proceeds of the insurance depends upon his survival of the expiration of the endowment period.  Upon the insured’s death, within the period, the beneficiary will take, as against the personal representatives the endowment period, the benefits are payable to him or to his assignee, notwithstanding a beneficiary is designated in the policy.  (AmJur and Couch Cyclopedia of Insurance Law)